Value4Risk Geofinancial Risk Consulting: While a high absolute level of debt does not by itself presage a crisis, reasons for concern include: 1) the very rapid credit growth in recent years potentially at the expense of weaker underwriting standards; 2) the diminishing links between credit and GDP growth; and 3) the brisk expansion of the “shadow banking” sector. Overall, changes to credit risk profile of Chinese banks will be tied to shifts in the perceived ability or willingness of the sovereign to provide support.
Posted on: Sat, 05 Oct 2013 07:45:35 +0000
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